WASHINGTON — President Obama announced Monday that highway projects spurred by the administration's $787-billion economic stimulus plan are coming in "ahead of schedule and under budget," but the program's early success may owe more to the depth of the economic crisis than to any newfound efficiency in Washington.
State governments, facing black-hole deficits, went into overdrive to grab a share of the $28 billion for highways and bridges that was provided in the stimulus bill.
Even before the huge spending measure cleared Congress, state highway officials were zeroing in on projects that could win quick infusions of federal cash.
Across the country, meanwhile, construction companies had seen business plunge so far so fast that they rushed to submit unusually low bids for the federally funded projects -- hoping to have at least some work in the summer construction season, and hoping to stay afloat.
"We haven't seen prices like these in 2 1/2 years," said Oklahoma Transportation Director Gary Ridley, whose agency has funded $230 million in new projects since the stimulus program took effect early last month. "The problems in the construction industry are wide and deep and that's evident in the prices we're getting."
Construction work suffered a falloff in highway projects financed jointly with state and federal funds and in road and infrastructure work for new subdivisions and housing tracts.
Speaking at the Transportation Department surrounded by construction workers from a highway project in Maryland, Obama sought to make the most of news that at least one small, but important, corner of his stimulus program is starting to generate positive results.
He said his administration has approved 2,000 highway projects nationwide since the stimulus fund took effect.
But in many respects, officials said, the speed of execution is a direct result of how badly states need the money and how hungry contractors are for work.
The California Department of Transportation, which is expected to get more than $2.5 billion in stimulus funds for highways, is "darn close to digging holes," said Douglas Failing, Caltrans' director for Los Angeles and Ventura counties. He said the agency plans to spend $189 million to improve the 405 Freeway, mostly by building a long-sought carpool lane on the northbound side through the Sepulveda Pass. Caltrans hopes to award a contract by the end of the month, with work beginning about mid-May.
The agency also is moving to spend $60 million in stimulus funds to repave the 710 Freeway between the 105 and 5 freeways and about $45 million to repave I-5 between Bob Hope Airport in Burbank and its interchange with the 14 Freeway.
Los Angeles County's Metropolitan Transportation Authority board, meanwhile, is not waiting for a stimulus check to arrive.
It is preparing to award contracts next week on two major projects that will be funded with stimulus money: the carpool lane on the congested 405 Freeway on the Westside and the purchase of 150 new buses, said agency spokesman Rick Jager.
Los Angeles County expects to receive $450 million for highways under the stimulus for transportation projects, a chunk of which will go to the cities.
John Horsley, executive director of the American Assn. of State Highway and Transportation Officials, said state highway departments have been gearing up for federal spending ever since summer, when then-presidential candidates Obama and Sen. John McCain (R-Ariz.) began talking about the need for further stimulus.
States typically have a three- to eight-year master road-building plan in place and most began going through their portfolios to see which projects they could push forward by accelerating engineering and environmental work.
Consequently, when the stimulus package was approved earlier this year, many of the states were ready to jump. They were given 120 days to commit half of their allotment of money or they have to give it back.
At the same time, several factors have conspired to drive down project costs.
At the top of the list is the searing downturn in residential and commercial real estate construction.
Because the companies that construct highways also tend to build the roads and other infrastructure for housing projects, their business burst along with the housing bubble.
Thousands of workers were jettisoned. Now, state officials say, construction companies are submitting especially aggressive bids in an attempt to win new business.
The massive falloff in construction is also driving down the cost of building materials, while the drop in world oil prices has reduced other costs.
In California, Obama said in his speech, some bids have come in as much as 50% under budget.
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Getting started in California
A list of 57 transportation projects totaling $625 million has been adopted by Caltrans as the first in line to receive federal infrastructure money. The projects include:
$75 million to repave three miles of rough pavement on Interstate 710 in Los Angeles.
$50 million to help reconstruct Doyle Drive, the southern access to the Golden Gate Bridge.
$46.7 million to replace two aging bridges on Highway 99 in Merced County.
$17 million to rehabilitate a stretch of Highway 99 in Butte County.
$16.8 million to construct two new lanes on Interstate 805 in Chula Vista to ease traffic congestion.
$13 million to replace the Russian River Bridge in Mendocino County near Ukiah.
For a complete list of the 57 transportation projects that were adopted and allocated funding, visit: www.dot.ca.gov/documents/federaleconomicstimulustransportationproject s.pdf
Source: Los Angeles Times